High Insurance Premiums Jeopardize Rural OBs

By Thomas D. Rowley

Malpractice insurance rates are on the rise, particularly in high-risk specialties like obstetrics, and that is creating a crisis in some rural communities.

West Virginia faces as difficult a challenge as any state. According to Evan Jenkins, Executive Director of the West Virginia Medical Association, a survey revealed that climbing premiums are prompting 40 percent of West Virginia’s doctors to seriously consider leaving the state, changing the nature of their practice, or retiring early.

In a state where 50 of 55 counties are already designated as medically underserved areas or health professional shortage areas, the problem is particularly acute. "We can ill afford, particularly in our rural areas, to lose any more of our physicians," said Jenkins.

While the situation is affecting doctors and hospitals regardless of whether they are rural or not, the problem is reaching a crisis situation in some rural areas.

"Is this only a rural issue? I don’t think so," said Alan Morgan, Vice President of Government Affairs and Policy at the National Rural Health Association, "but rural physicians don’t have the resources to address it the way urban doctors do."

In rural areas, physicians are less likely to have access to advanced medical facilities such as neo-natal intensive care units or to have colleagues who can help share the workload. In addition, rural doctors typically see a high percentage of Medicare and Medicaid patients, so they often get lower reimbursement levels than their urban counterparts. These factors magnify the malpractice insurance crisis in rural areas.

In West Virginia, Jenkins said, annual premiums are two to three times higher than for doctors in other states. Some doctors, he noted, cannot even get insurance. "West Virginia is experiencing both an availability and affordability insurance crisis," said Jenkins. "The climate continues to deteriorate. Rates continue to climb."

The American College of Obstetricians and Gynecologists (ACOG) concurs with Jenkins’s dire assessment. At a May 6 press conference, ACOG named nine "Red Alert" States where the medical liability insurance situation threatens the availability of physicians to deliver babies. West Virginia is one of those states; the others are Florida, Mississippi, Nevada, New Jersey, New York, Pennsylvania, Texas, and Washington.

Citing data from a survey by Medical Liability Monitor, ACOG said that nationally, the median insurance premium for OB/GYNs increased 167 percent from 1982 to 1998. In 2000, it rose seven percent. In 2001, it went up another 12.5 percent. For 2002, the expected increase is 15 percent.

According to American Medical News, eight states saw two or more liability insurers raise rates by at least 30 percent in 2001. In more than 12 states, one or more insurers raised rates by 25 percent or more.

"Across the country, liability insurance for obstetrician-gynecologists is becoming unaffordable or even unavailable," said ACOG President Thomas Purdon, MD.

The situation is particularly worrisome for rural areas, where physicians and care are often already in short supply. "Hospitals, public health clinics, and medical facilities in medically underserved areas begin to lose prenatal and delivery care. The impact on rural women and Medicaid patients is most acute," said Dr. Purdon.

In addition to the increases in premiums, some carriers are closing up shop. In December, 2001, The St. Paul Companies, the nation’s second-largest medical malpractice underwriter, insuring some 40,000 doctors in 45 states, announced that it would phase out of the business. The reason: it was losing too much money--$1 billion in the last five years, according to CBS News. Other companies have also left the market or become insolvent.

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